Great question.

I think you may be confused on some things, so I am going to lay out some detailed info.

First some background. Adding a gas furnace sounds like a given. Be sure to have your ductwork evaluated and make any changes to size or do any sealing of any leaky ducts. That is "step one" and with a minimal investment will get you heat in colder months, and also the possibility of "fan only" mode in warmer months to at least assist in circulating the air. This would be your most affordable option right now. The furnace would be in the basement.

With your preferences for having the system on/off per your schedule, please add a programable thermostat. If you are into tech, look at the ecobee wi fi stat that you can operate from your phone or any web connection. This gives not only the ability to use your phone as a remote control for your system (why get out of bed if you get chilly in the middle of the night...just grab your phone and adjust), you can also be on your way home and adjust the temperature to be as you want it when you arrive home. If you would never use these features, then a standard programmable stat would allow a 7 day schedule to have the pre-set temperatures you wish to be programmed to occur automatically.

Now, to add cooling to the home is a second step. You very well could do step one first, and do step 2 later if budget dictates this.

To add cooling to an older home such as yours, a couple of things will need to be addressed. First, is your ductwork set up for enough return air for cooling? If not, then things like undercutting the bottom of the doors by 1/2 to and inch can be done to increase air circulation. If your current heat system is forced air then your home is most likely already configured properly for adding air conditioning.

The second and more expensive question is do you have enough electrical power available for running AC? Depending on your electrical system, and how much renovations have been done on your home, you may need to upgrade your panel. You should have this evaluated if you are doing renovations, even if you decide to add the AC later, or want to be able to add it later. This would be a good selling feature even if you yourself don't ever add the AC.

Then the third consideration on adding cooling is should you do straight AC for the outdoor unit, or an outdoor unit that is a heat pump.

A standard direct expansion air to air heat pump is no different than straight AC in how it cools.

(I am not discussing ground source heat pump systems, only basic DX, or direct expansion systems that use refrigerant. A ground source system would cost 3-4 times as much as a DX system, and is very extensive requiring wells or a water loop in a pond or well.)

Based on cost of the equipment alone, a heat pump will be only slightly more costly than AC-- likely around $800 more would be a good estimate. What is the difference?

An AC only condensing unit with the compressor is the outdoor part of the system. It will be hooked up via pressurized"freon" lines (although it is now called R410A refrigerant, not technically freon which is also known as R-22) to a evaporator coil that sits on top of the furnace in your basement. The fan from your furnace blows air from your home across the evaporator coil with the cold freon circulating in its tubes, and the heat from your home warms the freon, the freon circulates back outside in its piping system (the line set), and the fan out side blow the heat into the outside atmosphere. Then the compressor starts the process over.

This is basically how AC works. So to add in AC you will need to add a coil on the furnace, the line sets between the indoor furnace and coil and the outdoor unit, and add the outdoor condensing unit.

A heat pump is basically a AC condensing unit that has a reversing valve to switch the direction of the refrigerant flow.

In cooling mode, it cools exactly the same way as the AC system.

When the system is operating in HP mode, that is for heating the home. It is actually warming the refrigerant from the heat in the outside air and then the refrigerant flows to your home, and the coil and fan on the furnace are transferring the heat into your home's inside atmosphere. Remember the refrigerant is compressed, so it is pressurized and really cold, so 45 degree outside air really offers a good amount of heat to be transferred to the system.

The advantage of a HP is that the amount of heat you get out for the amount of KW used is efficient. So that is the "big deal"

But this is only important if your electric rates are very low compared to your natural gas rates, OR if you cannot do a gas furnace and your only other heat option would be electric heat. If you compare HP energy use to other all electric heat -either electric baseboard heat, or a heat strip in an air handler (sometimes called an electric furnace), then the HP may be the better buy.

If you will primarily heat with natural gas, and have a mild climate (as you do), then it will most likely not be the best use of your money. Additionally, a mechanically simper AC only system would be preferred over the more complex piping and valves on a HP would require.

So, I suggest checking out the duct work and adding in gas furnace. Get a good programmable stat. At the time of your remodel add in the electric to add in AC. Put in the AC if you would use it. Probably not worth the extra money to get the heat pump.

Hope this has helped you with this.

Here is a link that might be useful: Ecobee Home Model Smart SI

liz and kris,

Just out of curiosity, what is the cost of running the gas line out to your home?

My sister lives in Portland and had an underground oil tank in her little bungalow. We ended up removing all of that system. Tank, furnace, AC and ductwork. Juliekemo gives you good advice and information if you choose to go conventional HVAC. I come at this a bit differently.

In my sisters home I installed a Rinnai EX-22 Direct Vent gas Furnace. It is heating the whole two bedroom place. It has a built in programmable t-stat. She is thrilled to be rid of the ductwork as she now has better use of the basement space.

In my own home in the foothills in N CA I had a terrible 5 yr old gas/central cooling system. The problem wassn't the equipment. It was the ductwork. Old duct work leaks like a sieve and MUST, by code in OR be pressure tested and sealed. That can be quite expensive...and then you have to buy the new equipment. The DOE says that you will loose between 18-42% of your energy in the duct system. I pulled all the ductwork out of the house and installed a Rinnai and two Fujitsu mini-split heat pumps. All of this equipment is "net to the space", maeaning no duct work to leak out the conditioning I paid for. I heat/cool the areas we are actually in and we are incredibly comfortable and pleased with the results. The 3 top manuf of the MSHP's are Fujitsu, Mitsubishi and Daikin. No one makes a DV wall furnace with the technology and features of the Rinnai.

Now...in fairness, my disclaimer. Prior to selling my business back east I was the Manuf Representative for Rinnai for 22 years and for Fujitsu for 12. I still consult with them. That said, after 48 yrs in the business, I will never install another piece of ductwork in a home. As well, I have put my money where my mouth is;)

You actually do not need a gas furnace if you go with the mshp. It will both heat and cool your space beautifully. In your case, I'd go with the mshp. I'd go gas for the tankless water heater. Electric water heating is costly.

Also, on the gas line in Ptld. My sister had the line installed free of charge as long as she installed the gas furnace and gas water heater. She has 3 months to do so or she gets charged a few hundred dollars. I did not have time to install the tankless water heater for her, so I guess she will be on the horn this week. Another trip to Portland;)

Thank you for the replies!

To clarify a few things:

The oil furnace was replaced 10 years ago and we ran new ducting upstairs when we first moved in 3 years ago, so evaluating/sealing/insulating the existing ductwork should be fairly simple as it is all exposed in the basement.

We do currently have a programmable thermostat that we use, although it's not fancy enough to let us control it from our phones. :P We will definitely have to look into that one with the new system!

We also do have an upgraded electrical panel--the previous homeowners did that maybe 5-6 years ago. When we did our initial renovations 3 years ago, our contractor said we were in great shape on that front.

If we install a gas furnace, the gas company will run the line for free. We'll also be putting in a direct-vent gas fireplace at the same time on the main floor.

It sounds like our best bet is the gas/ac combo and resealing/replacing/reinsulating the old ductwork. We have two returns in the house, both located downstairs. Would we need to move a return register upstairs to have enough air return for ac?

This post was edited by liz_and_kris on Tue, Jan 1, 13 at 12:20

Having a return on the upper floor will help is pulling hot air as it rises in the summer. Your house may be small enough that a second return may not be necessary. The contractor should evaluate the duct work as part of the installation. The more returns the better.

My recommendation would be to get a gas furnace and AC condenser. I would rather have a good HVAC contractor do the installation rather than the gas company. I suggest you have the gas line installed so that in the future you may add a gas hot water heater when it is time to replace it. You could also plan the piping in order to add a gas dryer and stove in the future. I think you will be quite pleased with the amount of money you will be saving on your fuel oil and electric bills.